Funds
- Three types of Funds -
- Consolidated fund of India (similar Consolidated fund of respective States) - Article 266
- Contingency fund of India (similar Contingency fund of respective States) - Article 267
- Public Account of India (similar Public Account of respective States) - Article 266
- It shows fiscal federalism character of India.
Consolidated fund of India (or States)
- Constitutional status under Article 266
- No upper limit
- It is under the authority of legislature (i.e., Parliament in case of Union and State Legislative Assembly in case of Consolidated fund of State).
- Sources of Consolidated fund -
- Taxes collected by the government
- Loans raised by the government
- Income of the government
- Expenditure -
- On functioning like defence, education, health, etc.
Public Account of India (or States)
- Constitutional status under Article 266
- No upper limit
- It is under the control of Executive.
- Sources of Public Account of India (or States)
- Disinvestment
- Small contributions made in Provident Fund
- Pension Funds, etc.
- Cess (Optional)
Cess - It is tax on tax. Parliament decides whether it goes to Consolidated fund of India or Public Account of India by passing a Money Bill.
Contingency fund of India
- Constitutional status under Article 267.
- It is an Emergency fund for unforeseen expenditure.
- Upper limit - ₹500 crore
- It is under the authority of the President (or Governor in case of States).
- Source of Contingency fund of India -
- Consolidated fund of India
Consolidated fund of India
Under Article 266, Consolidated fund of India has been provided. The same Article also provides for the Consolidated fund for each States.
It is a fund into which all the taxes collected, loan raised by the government and income received by the government is deposited.
It is the largest fund of Government of India and is regular fund placed at the disposal of the Parliament (State legislature in case of Consolidated fund of State), i.e., Parliament can control it.
No money can be deposited into, withdrawn from or appropriated out of this fund without the Parliament's sanction.
Public Account of India
Article 266 also provides for Public Account of India as well as Public Account for each States.
All the money collected by the Governor of India other than tax collected, loan raised and income received by the Government of India is deposited into this account.
For example - Proceeds from disinvestment, Small saving contributions, Pension funds, Provident funds, etc.
The fund is placed at the disposal of Executive, i.e., Council of Ministers.
Contingency fund of India
Article 267 authorises the parliament to provide by law an emergency fund called Contingency fund of India.
As per the law, Contingency fund of India has an upper limit of Rs. 500 Crore.
It is used by the president to meet unforeseen expenditure of Government of India and is placed at the disposal of the President.
HOTs
Appropriation of money from the Contingency fund is approved by -
- The President
Withdrawal of money from the Contingency fund is approved by -
- The Parliament
i.e., the President appropriates the expenditure out from the Contingency fund of India and is approved by the Parliament by passing a money bill.
After expenditure has been done from this fund, the expenditure is put before the Parliament when it reassembles for its approval and if the Parliament approved it, then the same amount of money is transferred from the Consolidated fund to the Contingency fund.
Article 267 also empowers the State legislature to create their own Contingency fund and is placed at the disposal of the Governor.
Charged Expenditure - These are the those expenditures that are met out of the Consolidated fund and parliament always approves it as a formal issue. These expenditures are permanently charged from the Consolidated fund of India.
These expenditures have been created in order to help autonomous institutions to maintain autonomous character.
For example - Salaries & allowances of the President, Chairman & deputy chairman of Rajya Sabha, Speaker & deputy speaker of Lok Sabha, Judges of Supreme Court of India, Judges of High Courts, Members of CIC, CVC, UPSC, etc.
Debt charges for which Government of India is liable are also charged expenditure.
States have their own charged expenditure.
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Relief fund - Relief funds are the funds to which general public may contribute voluntarily. They are used mostly to rehabilitate people affecting by natural calamities.
For Example - PM Relief fund, CM relief fund, etc.
These funds are subjected to audit by CAG (Comptroller and Auditor General of India).
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